Closure quashes unionizing

Published 4:00 am, Wednesday, September 10, 2003

I wrote last week how the Real Food Co. store in San Francisco's Noe Valley recently fired all its workers and closed abruptly, with no notice to customers.

The popular health-food store's new owner, Utah vitamin giant Nutraceutical International, said the layoffs and closure were due solely to long-planned renovations. But that may not be the whole story.

Former Real Food employees are charging that the actual reason they were sent packing was because the store's 30 workers were planning to unionize.

They claim Nutraceutical shut the 24th Street store because the company was afraid of union activity spreading to its other Bay Area health-food shops. Grievances have been filed with the National Labor Relations Board.

Sergio Diaz, a Nutraceutical spokesman, told me that Fresh Organics, the Nutraceutical subsidiary that purchased three Real Food outlets last year for $2.7 million, had no knowledge that the Noe Valley workers were seeking to unionize.

"Fresh Organics is not aware of any union organization campaign among its employees," he said.

"That's absolutely false," countered Simon Knaphus, a former Real Food worker who said he met with Diaz and another Nutraceutical executive, Bruce Remund, several weeks before the layoffs to present a list of demands from the Noe Valley staff.

"They knew we'd been organizing for months and they knew that we had almost 100 percent solidarity," he said. "We used the word 'union' openly in that meeting."

Jonathan Burkett, another former employee who said he also attended the meeting with Remund and Diaz, confirmed that the workers' plans were made clear to Nutraceutical. "We specifically mentioned union activity," he said.

Diaz did not return calls seeking a response to Knaphus' and Burkett's remarks.

Burkett said he was told by Remund after the employees' demands were presented that the company would hold a staff meeting on the matter by today, Sept. 10.

That meeting will never take place. Real Food workers were told around 9:30 p.m. on Thursday, Aug. 28 -- right before the Labor Day weekend -- that they were all being laid off. Customers were surprised to discover the next morning that the store would be closed for the remainder of the year.

Remund did not return repeated calls for comment. The Noe Valley store's manager, Conal Wildow, declined to discuss anything related to the layoffs.

But Diaz said that "our decision to close the store was purely regarding our remodeling. It was something we've been planning for a while."

Former employees aren't so sure. They note that new shipments of produce, cheese and dairy products arrived at the store just one day before everyone was sacked and the doors were locked.

"I went down there to see that weekend," said Mitch Genlot, one of the organizers of weekly union meetings. "All three compost barrels were full of fresh produce. They just threw it all away."

In fact, Genlot was fired by Nutraceutical on June 26 -- after, she says, management became aware that she was organizing the staff. "They said I had a bad attitude," she told me. "But when I asked for examples, the only ones they gave were from more than two years ago."

A month after firing Genlot, Nutraceutical fired Adriel Ahern, who had been the first to approach other workers about joining a union. "They said it was because of my negative attitude," she said. "They said it was affecting my customer service."

Both women have filed grievances with federal labor authorities.

Former employees I spoke with speculated that Nutraceutical was determined not to let union activity at its most successful Bay Area store spread to other health-food outlets.

Along with Real Food branches on 24th and Stanyan streets in San Francisco and one in Sausalito, Nutraceutical purchased Thom's Natural Foods on Geary Street last summer.

"They always bragged about how much more money we made than the other stores," said Kristin Hornstra, who was among the Real Food employees fired just before Labor Day. "This made people at our store angry because we wondered why we weren't being paid more."

Meanwhile, Nutraceutical is pushing to expand its influence over the Bay Area health-food scene. Gus Vardakastanis, owner of the Haight Street Market in San Francisco, said Nutraceutical offered $1.8 million for his store last year.

"I wouldn't do it," he told me. "They said that if they bought me out, they'd cut half the staff."

Similarly, Art Watkins, co-owner of the Food Mill in Oakland, said he rejected a buyout offer from Nutraceutical several months ago. "They weren't willing to pay what I'd want to sell for," he said.

Joseph Murillo, owner of Pacifica Farmers Market in Pacifica, said he too turned down Nutraceutical's buyout offer when he was approached last year. "They tried to lowball me," he said.

Murillo said he was told by the company that because demand for vitamins is slowing, Nutraceutical believes it can boost sales by controlling more retail outlets.

"That's the reason they gave me for why they want to get into a business they know nothing about," he said. "That's why they're scouting all health- food stores in the area."

Because of its steady profits, Nutraceutical was named by Forbes magazine last fall as one of the 200 "best small companies" in the United States.

Nutraceutical's chief executive, Bill Gay, said in a statement that the honor was due in part to "an ongoing emphasis on operating efficiencies."

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"We wish to thank our employees for their dedication and hard work," he said, "and our customers for continuing to support us."

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